Deutsche Bank custody services now handles some $4trn (E3.8trn) in assets worldwide following its acquisition of Bankers Trust.
“We reckon we are the second largest global custodian and the fourth largest custodian overall,” says Mary Cirillo, chief executive of global institutional services (GIS) at Deutsche Bank in New York. “The combination of BT and Deutsche Bank catapults us into a tier one positioning in almost everything we do.”
GIS includes the four business areas of global cash management, custody services, investor services and corporate trust and agency, the last two of which are new to Deutsche.
Cirillo points out that the merger of the two banks was initially driven by Deutsche’s ambition to acquire in-vestment banking operations in the US. “But then they found that there was this ‘little jewel’ in GIS, which has potential really to grow.” Last year’s combined revenues for the GIS businesses at the two banks would have come to $2.5bn in 1998. “That’s on a standalone basis, we are hoping GIS will generate a fair amount of synergy.”
On the custody services side, which is headed by Roger Booth in London, she points out that GIS would rank number one in Europe, four in the US, where Deutsche’s activities had been “limited”, and rank fourth in Asia. Ahead of it on the custody side are Chase, Bank of New York (BoNY) and State Street.
Cirillo points out that the investor services include structured investments, where DB ranked number three globally in passive management and number one in performance measurement, through the WM Company.
“What is really different about us is our transatlantic heritage,” she says. “In our case, 46% of our revenues comes from the US, 40% comes from Europe and 14% comes from Asia.”
But she admits there are areas where the bank is behind in product development and that there was a lot of work for the new group to do.
Deutsche board member Hermann-Josef Lamberti says GIS will have 7,000 employees and operate in 30 countries. It will come under the bank’s global technology and services (GTS) group, which he heads.
Cirillo says that the Deutsche/BT move had been seen to challenge the prevailing wisdom ‘that the top US groups were going to batter it out for for the global scene’. “There is a growing realisation that there possibly is a European player who will jopin that top grouping. We intend for this to be Deutsche.” Fennell Betson